Asian Stocks Gain as Traders Mull Trump Win, Fed: Markets Wrap

(Bloomberg) — Asian shares rose, following their US peers higher, as investors positioned for a second Donald Trump presidency and an expected Federal Reserve interest-rate cut.

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Chinese stocks were among the biggest gainers on optimism Beijing will roll out more stimulus measures. The S&P 500 surged 2.5% Wednesday, its best post-election day in history, and the Nasdaq 100 advanced 2.7%. The Fed is forecast to trim its benchmark rate by a quarter point Thursday.

The rally in US stocks reflected expectations that a Trump policy agenda favoring lower taxes and less regulation may support corporate profits. At the same time, Treasury 10-year yields surged 16 basis points on Wednesday on expectations the president-elect’s fiscal plans and proposal to hike tariffs will boost inflation and erode the Fed’s ability lower rates.

“After digesting Trump’s win of the presidency, investors in Asia are now focusing on China’s impending stimulus announcements,” said Frederic Neumann, a chief Asia economist at HSBC Holdings Plc in Hong Kong. “Hopes are rising that China may unveil a substantial fiscal package in the coming days, providing a shot in the arm for its languishing economy.”

Chinese stocks opened lower but then swung to a gain, with the CSI 300 Index climbing as much as 2%. Consumer and property shares rallied as traders bet Beijing would shift its focus to boosting domestic demand to offset any negative impact from Trump’s return to the White House.

Chinese policymakers lowered their daily reference rate for the yuan to the lowest since late 2023, a sign the central bank is allowing depreciation after a surge in the dollar pummeled the currency.

In other positive news, a report showed China’s export growth surged in October to the fastest pace in more than two years, extending a months-long run of resilience that helped sustain the economy before a barrage of stimulus measures aimed at shoring up domestic demand.

“It’s very likely that we will see significantly more fiscal and monetary stimulus from Beijing, which could offset some of the trade headwinds,” said David Chao, global market strategist at Invesco in Singapore. “All eyes are on what may emerge from China’s policy toolkit after the conclusion of the NPC standing committee meeting on 8th November.”

China’s regulators have told the nation’s banks to lower the rates they pay for demand deposits from other financial institutions in a move to free up idle funds to boost the economy, according to people familiar with the matter.


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